American Express, General Electric And Other Stocks Insiders Have Been Buying
Even with markets reaching for record highs, insider buying has remained strong of late. American Express, General Electric and Sprint were among those that have seen significant insider buys in the past week or so.
Insiders may sell shares for any number of reasons, but conventional wisdom says that they really only buy shares of a company for one reason -- they believe the stock price will rise and they want to profit from it. Pullbacks and sell-offs can provide a perfect opportunity for investors who have faith in a company to snap up shares.
The chief financial officer last week picked up 25,000 American Express Company (NYSE: AXP) shares at $83.21 apiece. That cost him around $2.1 million. This purchase came in the wake of a negative Department of Justice ruling and news of the end of the financial services giant's partnership with Costco.
This Dow Jones Industrial Average component has a market capitalization near $83.2 billion and a dividend yield of about 1.3 percent. The price-to-earnings (P/E) ratio is less than the industry average and the return on equity is more than 28 percent. Shares ended the week at $81.59, down more than 12 percent year to date.
Four directors recently purchased a total of 43,890 shares of Dominion Resources, Inc. (NYSE: D). At between $73.54 and $73.93 apiece, that came to more than $3.2 million. Note that Dominion Resources hiked its dividend by 8 percent earlier in the month.
This $42.3 billion market cap electric utility has an operating margin that is better than its industry average, but the P/E ratio also is greater than the industry average. The dividend yield now is near 3.5 percent. Shares ended Friday at $72.09, so it appears some money was left on the table.
General Electric Company (NYSE: GE) remains popular with both institutional and retail investors, and one director stepped up and bought 800,000 shares at prices ranging from $25.00 to $25.24. That 800,000 shares is the full stake.
This iconic conglomerate's market cap is about $261.2 billion, and it has a dividend yield near 3.6 percent. Its P/E ratio is less than the industry average and the operating margin is greater than the industry average.
With shares rising about 3 percent in the past week to land on $25.99, the buy looks well-timed.
Recently, activist investor Nelson Peltz and one other director together purchased about 933,560 shares of Mondelez International Inc (NASDAQ: MDLZ) in a price range of $36.98 to $37.09. That totaled around $34.7 million, and it brought Peltz's stake to more than 47.2 million shares.
This snack food and beverage company has a dividend yield of about 1.6 percent and a market cap near $60.9 billion. The operating margin is higher than the industry average, but so is the P/E ratio.
Shares have faced resistance around $37 since mid-February and closed Friday at $36.94.
A director last week obtained around 281,110 shares of Seattle Genetics, Inc. (NASDAQ: SGEN) for more than $9.5 million. The per-share price ranged between $33.67 and $34.48. The same director also picked up more than 4.1 million shares throughout December.
The market cap of this biotechnology company focused on cancer treatments is about $4.5 billion. Note that its return on equity and operating margin are both in the red, and short interest is almost 17 percent of the float.
However, the buy looks well-timed as shares closed Friday at $36.25.
The chief executive officer took advantage of a pullback following a downgrade to buy more than 5 million shares of this telecommunications company. At a share prices ranging from $4.92 to $4.94, the two transactions totaled around $25 million and brought his stake to almost 7.9 million shares.
Sprint Corp's (NYSE: S) market cap is around $20.2 billion. Its return on equity is in negative territory and short interest is almost 7 percent of the float.
At Friday's close of $5.12, shares were more than 23 percent higher than at the beginning of the year.
At the time of this writing, the author had no position in the mentioned equities.
Image credit: Marcus Quigmire, Wikimedia
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